>> live from ebay headquarters in california, welcome to a special edition of "bloomberg west" inside ebay. it started as an auction site. it has become much more, a major -- in in online claimant online payment. the company has transformed to a bona fide silicon valley leader, and making billions annually. "bloomberg west" is at the center of it all inside ebay. are on the ebay campus live from san jose, california. i am emily chang.

i'm here with cory johnson. and we also have jon erlichman. we have been learning a lot about e-mail. it has been exciting day. john donahoe is that ceo. yeah. it is like a smackedown between ebay and amazon. it is a minority of their business, action. -- auction. applicable be entertaining and enlightening for people. they will learn about a lot of things. >> we will talk about that would john donahoe. we will also learn about the ebay moonshot business. it is the same day delivery business. it will get to you within an hour. i have got these gloves. >> styling gloves. >> it was cold this morning. the payment business, that

is a monster of a business. billions of transactions every quarter. it is growing at double-digit rates. >> you go very in depth on some of the innovations they are working on at ebay. you are inside the commerce and innovation showcase. what is that about? >> this is a place where they try to explain to their many retail partners with the technology behind ebay allows for these retailers to do in their stores. we know that paypal is available in a lot of store locations. how do you explain that to retailers who see business change quickly? you build something like this. >> this looks like a shopping mall. >> this is where the honey mustard is. >> but it is not a store at all. it is a fake storefront built by ebay to demonstrate the future of shopping. >> this is our technology playground. it gives us an opportunity to showcase what we have put into the market. >> hill ferguson is the chief

product officer. look at what e- commerce retailers were able to do for our mind shoppers, personalizing the website in giving them custom storefronts was they register and come back to it, none of that is in the off-line world today. that means for having businesses to be placed cast registers with ipads that ron paypal software, to swapping wallets for phones. they are also partnering with rolling out high-tech touchscreen walls like this one in san francisco. interactive glass. we turn eight tablet storefront an interactive store. you walk up and you touch it. cart to your mobile phone. you pay on your mobile phone. >> last quarter alone, paypal

brought in $6,000 every second. 42% of e bill posey total haul for the whole quarter. total haul for the whole quarter. it is a crowded field for companies like square and google competing for the action. >> there are consumers who use the paypal wallet to shop. that is a meaningful advantage we bring. he a relationship with the consumer that goes beyond best -- just 60 numbers. -- it is a relationship with the consumer that goes beyond just 16 numbers. it is not just the big brands. it is small businesses that are welcome as well. they are basically online with ebay. emily? >> thank you. we are here with the guy who runs the innovation here at ebay. these digital storefronts, that was your group's idea.

how is that going so far? >> it is going great. we see people in the shopping environment. we are capturing them as a go from one place to another. it is a vibrant and engaging piece of glass. it is different. they see people interacting. they want him to rack as well and understand what is going on. >> and this is an experiment? >> that is right. this particular activation at westfield -- >> westfield mall in san francisco. >> they have lots of malls and lots of anti-spaces. those spaces do not feel good, even to the consumer. they do not like the idea of something going away erie if you take those spots and do something engaging that helps both retailers and our partners. inc. about a couple of these brands that we are doing. think about couple of brands that we are doing. toms.

you have this large, engaging last. -- glass. >> how fast will you skill this? >> as fast as the physical stores and as how the brands allow us. this glass is not just the glass on the storefront. it is a tabletop. it is the walls inside the store. it is the kiosk inside of the store were out in the street somewhere. we will take us everywhere we can. and of all the places that people are stuck. think of a train station or an airport or a bus depot or glass that is the around the closure at the bus stop. >> even the glass on the car window. >> absolutely. a worldrking with leader in innovation on glass. ,he future is to have glass

that you can see through, that can become an interface. at some point, all of the glass that is already in our life -- of the architectural glass, the window on the oven, the microwave, in the bathroom, they can become an engagement surface. >> it is your job to think about the future of shopping. john donahoe told me earlier that that amazon drones are a -- what do you think? >> it is everything. paypal and ebay marketplace. i look at the technology around us. it could be a connected device or a wearable or glass. hardwareke all of that to innovate on and we will create software in our marketplace and bring it to the market somehow. my idea of the future is essentially a digital personal assistant that takes care of shopping for your. these are the things -- for you.

if the things that you do on the weekend or things that you're passionate about. their.king on getting the answer is yes, but it is a journey. >> how you get there? >> we create software. for example, think of "minority report." phoneis an app on your that has awareness. imagine that glass that shows you things only in your size. that is how we get there. the use data and technology to create in reality what feels like a personal assistant. >> dear think amazon is wasting its time? optersg thing like octoc and google buying a robotics company -- >> i will give you an answer when i built the mobile business

for ebay. people talked about competition. -- goal is to have everyone i will look forward to how to innovate for ebay and its customers and its merchant partners. >> one of the most important things you say you're working on is time. shopping is a chore. it is fun, but it takes time and it is work. >> everyone can think about how much time you spend during a week or a month doing shopping where it is than aaron and it is not fun. i need to get more of the same mustard and mayonnaise and some bulbs to replace the lights that went out. you do not want to necessarily peru's thousands of gloves. eruse thousands of gloves. >> i was able to get some gloves . we want to give you your time

back. i want you to spend that time after work and that time on the weekends doing what you want to do as opposed to dealing with all of the aaron's. -- errands. >> you have a lot of patents on the technology. steve, thank you for joining us on "bloomberg west." thank you for having us. >> thank you. come, where is the free stuff? if there are other perks to lure workers. jon erlichman has been hanging out on the ebay campus. we will take a look at what he is up to. this is a fast-changing world of commerce. there is some physical activity. ♪

>> i am emily chang. insidecoming to you from

ebay in san jose, california for a special "bloomberg west." silicon valley is known for its talent wars. perks like food has become a way to attract new workers. ebay takes a no-frills approach to hiring. jon erlichman has a look at the culture of ebay. there are not a lot of restaurants out here. [laughter] sometimes people compare them to willy wonka's chocolate factory. at the end of the day, ebay wants to bring people here. here is more on that story. from the free gourmet meals at facebook, ebay is offering plenty of employee perks. ebay takes a different approach. >> we have a variety of different perks. that is not the way we ask people to join our company. >> shuttle service from san francisco to san jose, but employees pay for on-campus food and massages. >> the perks at ebay is working

for our company. people come and they believe in our purpose. >> that purpose enables the hundred billion dollars worth of commerce in 2015. ebay is adding to its army of customer support staff, already more than 31,000 strong erie it roughly 40% of new ebay hires come from an interim program. -- intern program. a case that may not care much about the freebies. >> they care about having an impact on the world. >> and recruiting from 300 schools globally, they look at how the next generation feels about the brand. >> we asked them what they think about when they hear ebay. what do they say? is thatis interesting ebay has changed so much in the last few years. not of the students -- not all of the students realize it. they still think it is an auction company.

grow, the its ranks business is growing faster. >> we are in an internet company that works off of the platform. the intention is able to grow the business about having to grow the number of employees at the same rate. jon erlichman. we will be back with more from inside ebay. ♪

>> welcome back. i am emily chang. insidecoming to you from the ebay headquarters from san jose, california. there are new features on its mobile app. that is just one of the new products that paypal. the company launched more digital payment products and in the previous five years combined. for johnson has more.

-- r johnson has more. johnson has -- cory more. paypal, ity acquired was losing money. they were worried that someone else would buy it. they said they were going to buy it for competitive reasons even though they would lose a ton. paypal is not dominant business. -- now a dominant business. campuses.re two this is mainly the paypal campus. there is the other campus that is that ebay campus. growingusiness is strongly. what is it that you think has really changed? , theebay acquired paypal business was losing hundreds of millions of dollars a year. it looked like a competitive purchase just to keep someone else from acquiring it.

now it is a stand-alone business. it is doing well. >> yes. e-commerce is growing. more people are biting on mobile. i'm mobile.- buying people are paying on mobile. for this shopping season, four friday andr black cyber monday, many people used paypal. >> 91% more sales on thanksgiving. 99% more on black friday. that is incredible growth. why is that happening now? bepeople do not want to waiting in stores. they prefer buying online and on mobile. mobile is growing like crazy. so great, growth is can you tweet about the results? or is it too big? >> we can see it.

in europe, the economy was slowing down. we had to compensate. generally the team really fights when those things happens to try to compensate for the macro. >> how do you compensate? >> be more aggressive and getting more merchants and doing more promotions. events, theymacro try to compensate. >> it is hard to see anything at a macro level. what are you staying in terms of the economic environment in the u.s.? >> this quarter was slow to start, right? look at the holiday shopping, it was pushed late. other than that, i think things are looking better and better. >> you have done so many acquisitions and have launched many products as well. john donahoe was excitedly showing this beacon. how do you describe it? >> we want to change how people

shop. people love shopping, but they hate paying. >> and it is not just because they are cheap? >> no. everyone is like that. we want to remove that friction and make it completely invisible to pay. with beacon, we did that. shop like into a copy you did earlier today -- coffee shop like he did earlier today and then your phone right rates. you can pay completely hands- free. one vibrates. completely hands- free. it can be a retail store or restaurants to enable that and have one of these systems. >> and i have big merchant partners, but how many point-of- sale locations are you in? have overu.s., we

100,000 locations. i do not want to make it specific -- >> you can. have hundreds of thousands of locations. in australia, tens of thousands of locations. there are tons of restaurants where you can pay at the table. you do not have to wait for the waiter. >> why should you pay online? the expense of the apple store where you talk to a salesman in the aisle and you make the purchase and leave. you looking at those type of innovations or are you there are ready? >> we are there are ready, but we have to scale those experiences. that is what 2014 will be about. >> to that point, i was talking to you today and one of the things i heard from a number of people is that there wasn't a

great consumer awareness of these point of sales. will there be a marketing campaign? when? >> this year and into 2014. you need to have enough of these expenses out there. 2013 has been the year where we have reinvented all of our existing products. now we have a lot of new products and experiences that we need to push out there. 2014 will be the year where we will invest in. >> you have a company called braintree. what did they have that you couldn't build in time? >> we need payments os. thatisruptor or builder wants to build something completely new that involves payments whether it is companies ore buber or others -- uber others, they need to be on top of paypal. both braintree and paypal, 100%

of the profits on uber goes to paypal. >> it has been slowing down measurably in the last quarter. it was 20%. yes, we think we still have a lot of growth ahead. mobile is growing fast. we will start seeing the benefits of all of our efforts. not in 2014, but 2015 and 2016. we can accelerate revenue. >> accelerate growth. you heard it right here. amazon might be experimenting with delivery drones, but john donahoe says it is a fantasy. first, to jon erlichman.

>> ebay is all about in enablingng, -- commerce around the world. we have onsiesies and a soccer ball. ♪

>> welcome back to a special edition of "bloomberg west" inside ebay. i am emily chang. to e-uction house started commerce coming ebay survived and thrived since the dot com bubble. here is a look at ebay by the numbers. mobile company with more than 31,000 employees and 33 countries around the world, driving three different businesses. there is a online marketplace where aliens of active users buy, sell, or bid on act comes

-- items. everysunglasses -- a pair 18 seconds. accessories are sold just on mobile devices. then there is paid about --pa paypal. you can pay in 26 different currencies on paypal, ranging from the turkish lira to the yen. it has big brands like levi's, mattel, and sony. earlier today i sat down with

the ebay president and ceo, and john donahoe, to talk about all aspects of the ebay is this coming including his his plans to amazon's plans for delivery by drones. a leader in global payments. under his leadership, ebay revenue has grown to more than $15 billion today. holidayhim about the shopping season and how it is going for ebay so far. >> it has never been a better time to be a consumer. technology is changing how consumers are able to shop. it is no longer just around black friday. we call it the cyber five. it begins on thanksgiving day where people can shop sitting on the couch and getting ready-to- eat turkey. they can shop on their smartphone or their tablet or their laptop. it continues into the holiday weekend. for that five day period, we saw all of our properties, 96% increase in mobile commerce.

>> i'm pretty happy. i got 50% of my shopping done. are you done? >> i'm getting there. [laughter] >> going into this holiday period, you said you had a lot of angst about the e-commerce market decelerating growth. how do you feel now? we are optimistic. not have ae, we did federal budget. we had a government shutdown. going into the fourth quarter, our hope is that consumers see there are great deals and great opportunities to get great gift for their loved ones. we are trying to make that as easy as possible for consumers. >> it was the biggest online shopping day on cyber monday. shopping was up 20% or so. growth is still slowing down. that is the reality. one of your big strategies is

connecting online and off-line. talk about connected glass. you have kept it in new york. you are doing it in san francisco. how is that going? nash ined to think of terms of shopping digitally or in a store. -- we used to think of shopping in terms of of digitally are in a store. you can have a seamless experience that has technology involved with it, but you have a choice of how to receive the item. we started with kate spade in new york. a touchscreen on their storefronts. when people walk by, they can shop and have it delivered to them with ebay now. and with the westfield mall in the bay area, we had these gigantic touchscreens. >> still to come in part 2 of my exquisite interview with john get yourebay can packages in nearly an hour,

something that amazon does not offer. that is next on this special edition of "bloomberg west: inside ebay." ♪

>> welcome back to a "bloomberg "inside ebay." i am emily chang. in a world of same-day day delivery, time is money. ebay has an advantage over the competition. they offer same-day delivery within an hour, something amazon has yet to offer. of my interview with the ebay president, john donahoe , i asked if he could give us numbers behind ebay now. >> we're not publishing any numbers on it, but what we have done is in three cities, we partner with retailers so that when you have a situation and you want something to date like these gloves and you do not want to waste the afternoon away or have it delivered to you

tomorrow, you want it now. you go to ebay now and order the gloves and the courier will have it to you within an hour. howhen i tell us more about it is going? i download the app. there are a few reviews. >> we are building the consumer experience. when you build a new experience, you have got to get the experience right. the consumers that are using it like it a lot. it is evidence that we think it is successful. we have expanded it from one market to three and to five. we just buy a company called shuttle that will help us expand to more cities across the u.s. >> amazon made a lot of headlines a few days ago stalking about deliveries by drones. they are working on octocopters. >> no, we're not focusing on long-term fantasy. we are focusing on things that will change that tumor -- consumer experience. >> other companies are also experimenting with delivery.

there are upstarts. how do you have an edge on that? have millions of active consumers that come to ebay intending to shop. we have paypal, which makes payments easy and safe. we start with an enormous advantage of an ecosystem and a willingness to partner with retailers and not compete. there will be a lot of people trying different innovations. our focus is delivering a great experience to consumers both in the u.s. and around the world. >> speaking of drones and googles moonshot, they have acquired a lot of robotics companies. do you think moon shots are important? i think bold innovation is important, but our focus is around commerce. the notion of making a storefront window a touchscreen, i called a bold innovation. the notion of saying you can get a product delivered to you within an hour, i call a bold

innovation. whatyears ago in mobile, we were doing was considered bold innovation. $20 billion in mobile payment volume. we have those moonshot be focused in our area of commerce. now 42% of the revenue that you guys bring in. when will it become the majority? >> do the math. it is only a couple of years out. ispal, what it is doing paypal is making payments safe and easy. been online.s we are the clear leader in mobile payments. thateality, emily, is people like to shop. no one wants to pay. paypal is making it easy to shop and making the payments a frictionless experience. you made a pretty big acquisition. what will be the strategy be for next year?

small acquisitions? or bigger bets? isthe braintree acquisition a great example of what we are talking about. braintree is a power maneuver. you are shopping and not really paying. braintree powers many of the sharing mobile first business models that are being developed and will continue to grow. we are bringing in the same principles to the off-line world. i went to the starbucks in our lobby. i walked in and have my mobile phone in my pocket. i did not pull it out. i do not carry a wallet anymore. it recognize that it walked into the starbucks and when i got to the front of the line, the arista had my name and picture on the cash register and said, john, the usual? she pressed a click when i bought it and i got a text. >> what about china? you have a limited

partnership in china. how do you get in on the that action? >> we enable chinese sellers to reach consumers all over the world. do 6% andwe will billions of dollars a volume of chinese sellers selling on ebay around the world and using paypal to reach consumers. we have a strong presence in china, but it is a cross-border residence. we are not competing in the domestic market. we will look at that. it is early days in china. about this. ask you sheryl sandberg wrote about you and her book. in work andalance family. you have done a lot to try to elevate women at ebay and working dads. marriage is a partnership. you could argue that my wife is my boss.

we work hard to balance the work and raise a family. for me, this issue when it come about competing and winning. if we will be successful, we need the best people. by definition, half the people in the world are women. we need to have the best women and men and have a diverse team that can lead to the best possible decisions and executions. it is a matter of good is this and it extends back to the family and in my case, being a good husband. his wife is his boss, everyone. yes, that is what he said. the ebay ceo, john donahoe. earlier we talked about how i got my gloves delivered to me on the set via ebay. ebay has same-day delivery service. follett and ebay courier around. ebay couriern

around. >> this is a great, innovative story going on. technology allows us to be more impatient. ebay has seen that happen and is taking advantage. here is more on that story. do you need something and need it now? if you live in the bay area or that apple, james her april could be waiting to answer your call. >> i just got an order. >> a bluetooth speaker. looks like i'm going to best buy. valets for shopping ebay now, the newest addition to the online marketplace. it is an experiment and instant delivery. customers in san francisco and san jose and new york and chicago and dallas can purchase electronics from nearby retailers. the ebay valley delivers the goods in under an hour. >> mobile has changed the consumer immediacy.

the delivery is a logical expansion >. >> this holiday season, it is waving a fee in the hopes to gain more shoppers. >> we know that working professionals really like the service. over half of our usage between 1:00 and 5:00. 5:00/0 and >-- 5:00. >> amazon is building facilities closer to cities to reduce delivery times. and jeff bezos is working on a program that will deliver packages via drones. retailers love that we are able to help them take advantage of the existing stores and make consumers -- meet consumers increasing expectations. when they win, we win. >> earlier i ordered my gloves on ebay now.

it was a pleasant experience, the valet. let me know when she got my order when she was at macy's and then when she arrived here. how did they make this economical for them? why they have been quiet about the numbers behind it. they are just starting to build this up. they're trying to figure out if people will order gloves like you or something else. we get a sense that people like to buy electronics and different phones and gadgets through a service like this. when he think about the corporate story of technology companies and doing acquisitions, they acquired a company called shuttle. that allows them to get that scale and say they can get this to a couple of dozen cities quickly. they are figuring out the financials behind what the customer wants and whether it

can make sense for them and roll it out. they are getting scale from an acquisition they have done. maybe this becomes an extension of the bigger story and maybe the financials do not have to make as much sense if it is part of that broader story. you are right. they are still figuring it out. honesty thatin all i will use it again. now i know about it and how good it is and how easy it is. i'll definitely keep in mind for future purchases. thank you. bloomberg tv will take you inside another company next week or the shipping giant, ups. we will get a tour of the ups hub in louisville. that is all day tuesday on bloomberg tv. events go to sold-out like the super bowl, but do not have a ticket? chances are you might turn to that ebay ticket

have called stubhub. ♪

>> welcome back. i am emily chang. "bloomberg west: inside ebay." broadway,uper bowl to fans turned to the ebay stubhub to buy tickets. stubhub is using technology and data to create a better experience for fans. i know you love your concerts. >> and a big sports fan as well. there is no more efficient market than stubhub. stubhub will opt in with a solution. ebay scooped it up in acquisition a few years back. check this out. -- it is time to

change the way that tickets are sold. fant is about the experience. innovation is used across the business. takes a percentage off ticket sales on the rest goes to the seller. stubhub is after a lot more. the business has grown dramatically. back then it sold 10 tickets a minute. today in cells went to get every second. everysells one ticket second. it has grown with mobile ticketing. stubhub is a risk for even. the ebay gross margins have fallen.

milking big data could be the key. .> this is a new science we are trying to understand that. arasu is the chief technology officer. >> where we are taking it to the next level is what that consumers might be intending to do. >> for years i bought tickets from a site called mr. ticket. market isb sets the like a new york stock exchange and nasdaq. >> mr. ticket's phone is ringing off the hook. [laughter] really sucked up the

industry. >> it is time for the bwest byte. >> there are so many ideas of what ebay is. it is constantly inventing stuff. >> steve said they have specifically filed 35 patents that are pending. pleaded aps earlier in the program of the culture of people who are hired here -- and we did early in the program of the culture of people who are hired here. >> what kind of patents? specifics. know the

there are young people who are highly motivated and they get the pace of the ebay story. by the way when they learn it is not necessarily an auction, when they think about the ways for commerce to be facilitated by 2014, what are some things they could be cooking on -- how many patents need to be public? >> they will talk about a patent portfolio. it is interesting science. they use those patents in aggressive way. all of the small businesses out there, this is their platform on the internet, having those patents and security is an interesting and powerful approach. >> i'm sure they will be a big part of the future. >> and gloves related patents in the future. >> yes. i'm inspired. i'm so glad i have these. muche enjoyed the show

more. thank you for joining the special edition of the show. ♪

>> from bloomberg headquarters, i am mark crumpton. this is "bottom line." we focus on the intersection of business and economics with a main street perspective. tonight's stocks soar after the november jobs report tops estimates. the unemployment rate falls to seven percent. we go inside ebay within exclusive interview. we will meet an entrepreneur who takes out her stress on the roller derby track. to our viewers here in the united states, and those of you joining us from around the world, welcome. we have full coverage of the stocks and stories making headlines tonight. su keenan reports